Requirements for Gifts, Prizes and Awards

Scope

This procedure outlines the requirements and restrictions for gifts, prizes, and awards purchased with University funds for both employees and non-employees of the University. IRS regulations require reporting of gifts, prizes and awards as taxable income to the recipient if the gift, prize or award meets certain criteria.

Authority

Definitions

Cash Awards:

Cash payments to an employee for any purpose constitute gross wages, which are subject to taxation. Any award of this nature should be paid to the employee via the Payroll system. Please refer to Human Resources and Payroll procedures for hiring, contracting and personal service agreements.

Cash payments to a non-employee for any purpose must be reported to Accounts Payable with proper documentation.
A Gifts, Prizes or Awards Recipient Information Form must be completed for every person receiving an award of cash, no matter the value.

Gift Cards/Certificates:

Gift cards or certificate may not be purchased with any University funds, including foundation, agency, and grant related funds, unless specifically pre-approved in writing by the University Controller.

Gift cards or certificates maynot be purchased with the UNC Visa Card.

Gift cards or certificates may be purchased by an individual employee with their own money as a personal gift, but the purchase will not be reimbursed by the University.

Non-Cash Awards:

Non-cash awards are tangible property and generally are taxable if given to an employee or a non-employee. However, "de minimis" fringe benefits that are so small that accounting for them is unreasonable or administratively impractical are not taxable to either employees or to non-employees.

UNC has established a $50 threshold for de minimis fringe benefits.

Therefore, any tangible award, such as a coffee cup, pen, blanket, etc., that has a fair market value under $50, does not need to be reported to Accounts Payable. If an item given is over the $50 threshold, the Gifts, Prizes or Awards Recipient Information Form must be submitted to Accounts Payable - for both employees and non-employees.

Tangible property that is donated to the University for employee prizes and awards (e.g., the Colorado Combined Campaign drawings) are permissible, but may be subject to taxation if the value of the award is over the de minimis threshold.

De Minimis:

UNC has established a $50 threshold for de minimis fringe benefits.
If a non-cash award is given with a value over this amount, then the Gifts, Prizes or Awards Recipient Information Form must be completed and the amount of the award will be added to the employee W-2 and a 1099-M may be issued to the non-employee for the amount of the award.

Questions regarding items that are near the $50 de minimis threshold may be directed to the University Controller,Mary Sorensen, or the University Tax Accountant, Lacey Snyder, for details on requesting a waiver from reporting requirements.

Retirement Awards:

The purchase of employee retirement gifts with University funds is prohibited.

Bear Bucks:

Bear Bucks are cards that are internally purchased from Dining Services and are considered to be non-cash gifts, prizes or awards. Bear Bucks are an allowable purchase. Bear Bucks gifts, prizes or awards must be reported for both employees and non-employees according to the procedures outlined above for non-cash awards.

Procedures

Gift cards may not be purchased for employees or non-employees with University funds, unless written approval is received from the University Controller. Please complete a Gift Card Purchase Waiver Request form. Approval must be obtained prior to the purchase of the cards/certificates.

Small employee awards for noteworthy accomplishments may be made by University governance groups or through a recognized University program. Awards are limited to tangible property (no cash or gift cards). Cumulative non-cash awards to an employee in any year over $100 will be reported on their W-2 as taxable income..

The purchase of employee retirement gifts with University funds is not permitted.

The Gifts, Prizes or Awards Recipient Information Form must be completed for all non-employee cash awards of any dollar amount.

The Gifts, Prizes or Awards Recipient Information Form must be completed for all employee and non-employee non-cash awards that meet the $50 de minimis threshold.

None of these procedures should discourage departments from taking up collections to present gifts to employees for special occasions, accomplishments or retirement.

Payments to confidential/anonymous research subjects are permitted with pre-approval by the Director of the Office of Sponsored Programs and the University Controller. Procedures and forms for these payments are located at: Payments to Confidential/Anonymous Research Subjects.

Accounting Related Information

Account Code 72312 - Prizes and Awards REPORTABLE - Cash awards of any value, non-cash awards over $50 in value. MUST complete a Gifts, Prizes or Awards Recipient Information Form to Accounts Payable.

Controller approved purchases of gift cards of any value should be used in conjunction with Account code 72312 "Prizes and Awards REPORTABLE" and Account code 72952 "Internal Sales Prizes REPORTABLE" must be reported to Accounts Payable using the Gifts, Prizes or Awards Recipient Information Form.

Account code 72310 "Awards for Recognition Nonemployee" should no longer be used.